Toronto #realestate market could frustrate push for price fix, #CMHC says #Mortgage #stresstest

OTTAWA—Justin Trudeau’s Liberal government has been under pressure to rein in runaway home prices, but a study by the national housing agency suggests the prime minister will struggle to exert control over the real estate market in Canada’s largest city.

Conventional economic factors including population, incomes and borrowing costs accounted for less than half of the 40-per-cent surge in Toronto home prices between 2010 and 2016, according to a Canada Mortgage & Housing Corp. (CMHC) study obtained by Bloomberg through a freedom of information request.

Supply constraints, and to a lesser extent speculation and investment, accounted for most of the rest of the gains, although a lack of high-quality data about the availability of land made firm conclusions hard to draw.

The report details the “puzzling” dynamics of the Toronto market and suggests factors other than demand are driving prices higher, leaving Trudeau few options to ease the affordability crisis. It may also mean more needs to be done to promote supply and curb speculation, issues more readily dealt with at the municipal level.


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